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Why isn't interest expense subtracted when determining net incremental cash flows for capital budgeting purposes? A) Interest expense is not a depreciable expense. B) Subtracting
Why isn't interest expense subtracted when determining net incremental cash flows for capital budgeting purposes?
A) Interest expense is not a depreciable expense. |
B) Subtracting interest expense would be double counting interest, since cash flows are discounting by a cost of capital that includes the cost of debt which is interest. |
C) Interest expense is a non-cash expense. |
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